Amex cards won't accept your debts

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American Express has pulled the plug on balance transfers for new credit card customers.

Since last Monday, applicants for any Amex card will no longer be able to switch their existing plastic debts over to it.

The company is the first to withdraw from the balance-transfer market altogether. If its move is copied by other lenders, this will represent a further blow to the "rate tarts" who flit from one card deal to another as they try to pay little or no interest on debts.

These savvy card users have already been hit hard in recent months, as 0 per cent deals on balance transfers become rarer. The lending criteria of many providers has been tightened, and fees introduced of up to 2 per cent.

Amex, whose transfer deals had focused on low "life of balance" rates of between 4.9 and 6.9 per cent until paid off (as opposed to 0 per cent offers for limited periods), says it wants to concentrate on customers who spend instead.

"We are focusing on attracting those who primarily want to take advantage of our reward schemes such as Nectar loyalty points and Money- Back," a spokeswoman says.

Its decision has been described as "momentous" by Martin Lewis of the consumer-advice website "Amex offered the leading 'life of balance' rate - allowing some customers to shift their debts to a rate of 4.9 per cent, which lasted until the entire debt was repaid," he says.

"This meant it was possible to have long-term cheap debt on a credit card, without needing to be a card tart."

If the trend is adopted across the market, he stresses, that should worry consumers who rely on being able to shift large debts around cheaply.

For now, though, there is plenty of choice.

Nick White from the price-comparison service says there are still more than 40 "life of balance" deals available.

"Intelligent Finance is leading the way at 4.95 per cent, while NatWest is offering a rate of 5.8 per cent and GE Money 5.9 per cent," he says. Other recommendations include Capital One and Sainsbury's, both at 5.94 per cent.

Don't forget that most lenders will use your repayments to pay off the cheapest card debt first - the transferred balances. The more expensive debt, for new purchases, will be left to rack up interest.

If you can, keep separate cards for transfers and for new spending. Having two cards may require more monitoring on your part, but you can save hundreds of pounds in charges.

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